Consider the Following Information and Then Calculate the Required Rate

question 135

Multiple Choice

Consider the following information and then calculate the required rate of return for the Global Investment Fund, which holds 4 stocks. The market's required rate of return is 13.25%, the risk-free rate is 7.00%, and the Fund's assets are as follows: $$\begin{array} { l r r } \text { Stock } & \underline { \text { Investment } } & \underline { \text { Beta } } \\\text { A } & \$ 200,000 & 1.50 \\\text { B } & 300,000 & - 0.50 \\\text { C } & 500,000 & 1.25 \\\text { D } & \$ 1,000,000 & 0.75\end{array}$$

• A) 9.58%
• B) 10.09%
• C) 10.62%
• D) 11.18%
• E) 11.77%

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Definitions:

Profit-Maximizing Quantity

The level of output at which a company achieves the highest possible profit, determined by analyzing costs and revenues.

Marginal Revenue

The supplementary income earned by selling an additional unit of a good or service.

Negative

Referring to a less than zero value, indicating a deficit, loss, or detrimental condition in various contexts such as economic indicators or mathematical values.

Infrequently Used Bridge

An infrequently used bridge is a bridge structure that sees low usage or traffic, often due to its location or the availability of alternative routes.